“Morning Minute” is a daily newsletter written by Tyler Warner. The analysis and opinions contained within represent solely the author's views and do not necessarily reflect the stance of Decrypt. You may also follow their daily news program “FOMO HOUR”, which covers the most important news and market trends.

GM!

Today's top news:

• The main cryptocurrencies fell by 1% to 2% along with the stock market, while BTC reached $80,000.
• HYPE Surges on News of Cooperation with the New York Stock Exchange and the Introduction of Sustainable Contracts to the United States
• Bitcoin ETF recorded another net inflow of $137 million, turning into a net inflow in October.
• The settlement volume of the stablecoin Visa has increased by 10 times year-on-year.
• Y Combinator Announces 6 Key Directions in Cryptography, Focusing on AI, Stablecoins, and Tokenization

Hedge funds withdraw from Bitcoin ETF trades; sovereign wealth funds take over

Every quarter, large institutions are required to disclose their positions to the U.S. Securities and Exchange Commission (SEC). Summarizing these filings from before Bitcoin's peak in October 2025 until the end of June, the picture is clear: nine hedge funds and banks sold approximately 68,000 Bitcoin equivalent to ETF shares over these nine months, which is worth about $5.4 billion at current prices. Millennium, Brevan Howard, Goldman Sachs, D.E, Shaw, and five other institutions led the sell-off. Some reduced their holdings by a third, while others sold all of theirs.

This transaction is not based on a negative view of Bitcoin. The strategy is to buy ETF, while simultaneously going short on Bitcoin in the futures market, and then earn the price difference between the two. As long as the price difference is higher than the return that could be obtained by putting cash directly into treasury bonds, and if the operation is done properly, one can make money regardless of whether Bitcoin's price rises or falls.

Before the peak, the annualized yield corresponding to this price difference was 7.9%, which is a full 3.9 percentage points higher than that of treasury bonds. By the end of October, this yield dropped to 4.8%, only just over half a percentage point higher than that of treasury bonds. According to the estimates of Alex Thorn, after deducting fees and financing costs, the remaining yield is only about 1.5 percentage points higher than that of cash, which is not worth the effort. Galaxy

He wrote, "It's not the price, but this arithmetic calculation that led to the departure of the multi-strategy trading desk."

This can also be observed from the futures data. The positions on both sides of the trade were reduced by nearly the same amount, about 57%.

Let's see who entered the market to buy: Morgan Stanley's wealth management department, Mubadala, and the Abu Dhabi Investment Council. In addition, about 2,200 other declarants collectively increased their holdings by approximately 20,000 bitcoins. Hedge funds are selling, while sovereign funds and wealth management institutions are buying. As for those investors who are too small to be required to declare their holdings – consultants, family offices, and individual investors – they only reduced their holdings by 6.6% despite a 49% drop in prices. That is to say, middle-class Americans continue to hold onto their bitcoins.

That's the whole story. Those who were never real Bitcoin investors left; those who truly held it remained steadfast.

Since June, these funds have added another 87,000 Bitcoins – this time through direct purchases, rather than arbitrage.

The interest rate environment is also changing. The Federal Reserve left interest rates unchanged on Wednesday, but expectations for December have quietly shifted: a month ago, traders anticipated a 59% probability of two more rate hikes before the end of the year; now that probability is zero. Market expectations for further tightening have roughly halved. Less tightening is beneficial for all risk assets.

The capital flow in October has already shown such changes. In the middle of the month, there was a net outflow of $907 million; as of Tuesday, the overall situation has basically stabilized, with $724 million flowing in over the past 8 trading days.

Fast money has already left the scene, but the believers are still here. That is the foundation you can use to build a bull market rebound...

🌎 Macroeconomics, Cryptography, and Markets

• Despite the significant rise in HYPE due to news of cooperation with the New York Stock Exchange, major cryptocurrencies still closed lower; BTC fell 1.6% to $80,000, ETH fell 2% to $2,320, SOL fell 3% to $100, HYPE rose 7% to $88, and ZEC fell 3% to $1,270.
• The top-performing altcoins in terms of increase include PI (+3%), SPX (+4%), and STABLE (+2%).
• Crude oil remains at $102, while gold falls 0.1% to $4,040.
• After Google's financial report, stock index futures declined; the Dow Jones fell 0.28%, and the Nasdaq fell 1%.
• The Federal Reserve maintained interest rates between 3.75% and 4.00% in a vote of 10 to 2, with both opponents supporting an additional 25 basis point hike.
• According to Bloomberg, Intercontinental Exchange (Intercontinental Exchange), the parent company of the New York Stock Exchange, is collaborating with Trade.xyz to launch regulated sustainable futures in the United States. The trading platform will operate on the infrastructure of Hyperliquid and offer contracts linked to stocks, indices, commodities, and foreign exchange. Once regulatory approval is obtained, ICE will also hold a stake in Trade.xyz under undisclosed terms.
• Zhao Changpeng stated that the real demand for tokenizing U.S. stocks comes from outside of the United States. He mentioned to Andy of The Rollup that it is very difficult for overseas users to open accounts with U.S. brokerage firms, and pointed out that in some countries with populations over 100 million, the daily trading volume of their stock markets is only 50 million U.S. dollars. He also believes that tokenization could potentially open up markets for assets that do not have any real trading venues at all, such as water and rare earth minerals.
• JPMorgan, Coca-Cola, Dell, AMD, Adobe, Applied Materials, and Sandisk have joined the list of issuers that have prevented the tokenization of their stocks from going live on the OKX-ICE platform, increasing the number of opponents to 33 within 13 days.
• The stablecoin settlement volume of Visa has exceeded $25 billion annually, which is more than 10 times higher than the same period last year.
• Y Combinator listed six priority directions in cryptography for the next six months in its October startup project solicitation: AI driven financing, US dollar and non-US dollar stablecoins, new stablecoin banks, tokenization of real-world assets, trading platforms, and API infrastructure for AI agents; their view is that growth is now more driven by institutional adoption rather than retail speculation.
• A new survey commissioned by DeFi Education Fund and conducted by Ipsos shows that 22% of American adults have tried cryptocurrencies, which is higher than the previous 18%; however, the usage rate over the past year has remained at 13%, indicating that almost all of the increase comes from those who tried and then left thereafter.
• Blockchain data provider Allium (whose clients include Visa, Stripe, and Coinbase) disclosed that its system was subjected to unauthorized access on October 25th, and revoked all existing API keys. Customers were required to reset their passwords, enable multi-factor authentication, and have their credentials reissued.

Enterprise Treasury and ETF

• On Wednesday, Bitcoin ETF had a net inflow of $137 million; Ethereum ETF had a net outflow of $21 million.
• Strategy Shareholders approved the distribution of dividends on its four preferred stocks on a daily basis, including weekends, with 99.3% of the votes in favor. This change will increase STRC's annual dividend record period from 24 days to 365 days, with the aim of reducing stock price volatility.

Meme Coin Tracking

• Meme coin leaders generally see declines: DOGE falls 2%, SHIB falls 2%, PEPE falls 1%, PENGU falls 1%, TRUMP falls 2%, SPX rises 3%, BONK falls 1%
• Robinhood Chain leaders show mixed gains and losses: Pons Falls 5% to $185 million; Cashcat Remains flat at $100 million; AI Rises 3% to $72 million; Standard Rises 10%; Stonkbroker Rises 7%; Pizza Leads the gains with a 275-fold increase
• The top-performing tokens in terms of increase include Dubble (100 times), Float (150 times), GTA6 (+100%), and Catbot (+700%); Stonk increased by 20% to $160 million.

💰 Tokens, Airdrops, and Protocol Tracking

• Pump.fun launches Perps within the Pump application, supported by Hyperliquid. It offers leverage of up to 20 to 40 times, covering major cryptocurrencies; users placing orders through Perps are also eligible for order placement rewards.
• Calculated by revenue, Hyperliquid ranks first among on-chain protocols with $2.04 million, followed by Pump.fun with $1.71 million and Collector Crypt with $427,000.
• Birch Hill, founded by former employees of Goldman Sachs and BlackRock, led a financing round of $4 million in the in token issuance by Mult. The project aims to bring apartment, farm, and energy loans from the United States onto public blockchains.
• A day after the US Federal Reserve (OCC) approved Ripple of the National Trust Bank, Moody's awarded it a long-term A2 and short-term P-1 rating for its stablecoin RLUSD. The reason for this rating is that the bank's reserves are mainly composed of Treasury bills held by Bank of New York Mellon (BNY), with a coverage target of 103%.

🚚 What happened to NFT?

• NFT Mixed gains and losses among leaders: Punks Falls 4% to 29.3, ETH, BAYC Rises 3% to 6.35, ETH, Pudgy Remains flat at 2.53, ETH
• OSF Red Light District (+150%) and Musegod Muses (+141%) lead the gains

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